Actors Antonio Banderas and Melanie Griffith, designer Calvin Klein, talk show host Rush Limbaugh and music legend Barbra Streisand have all received co-op board turndowns.
Difference between condo and co-op boards
Yes, condos and co-ops have similar application processes, but the big difference is that a condo board doesn’t have the ability to reject a buyer, only the right of first refusal to purchase.
Though this is an option that is rarely exercised, the condo board can still rigorously review an applicant, ask for more information and hold up the process prior to giving up their right.
Conversely, in a co-op, each candidate needs to be approved by the board and part of the approval process is an in-person interview with the members of the board.
An experienced broker will know the criteria and preferences of the co-op boards before their client even makes an offer to purchase an apartment. Once an offer is accepted, the broker should be able to help create a board package that’s designed to impress and get their client approved.
Submitting an application
Once you find the perfect co-op and have your offer preliminarily accepted, the seller’s broker will send you a copy of the board’s purchase application asking to document detailed information about your employment history, personal background and finances. After signing the purchase agreement, you’ll be expected to compile and submit (with the help of your broker) a full board package. This includes, but may not be limited to, a completed credit release form, contract of sale, recent tax returns, and landlord and bank references.
You’ll also need to collect a combination of personal and business reference letters in which your friends and associates describe your relationship and talk about why they think you’d make a great neighbor. Who should you ask to be a reference? Ideally, someone with whom you have a long and documented history. Some boards require multiple personal and business references.
Include a cover letter, if allowed
When your broker submits the board package to the managing agent on your behalf, you may want to include a cover letter. Check with both your broker and the listing broker to see if a cover letter is appropriate. Some boards prohibit anything except the application itself. If you have the opportunity to write a cover letter, you should share personal details about yourself and why you’d like to live in the building. Think of the letter as a way to humanize your pile of forms and legal documents.
Prepare for the interview
Frankly, if you made it far enough to have an interview with the co-op board, you can be almost certain that they have reviewed and approved your board package, mainly your finances, which is the hardest part. Now it’s just a formality.
Plan on meeting in person with three to five members of the board. These interviews typically do not include the real estate broker, real estate attorney or managing agent — it is just the purchaser(s) and the co-op board. If you are presenting in front of the board, think of it like a job interview.
The interview is not only designed to determine if the applicant will be a good fit in the building, but to provide an opportunity for the board members to ask questions or get clarity about anything they saw in your application. If the board has a “no pied-a-terre” policy and your board package shows that you own real estate within 100 miles of New York City, they may use the interview to ask you about that property to determine your true intentions with the apartment.
Prior to your interview, review your board application and try to anticipate any financial questions that may arise and be prepared with an answer. Be cordial and honest in your responses. As for what to wear? Business attire is a safe bet – you don’t want to be too casual or risqué.
What not to do
Don’t show up late for your interview. Don’t ask questions that you should already know the answer to. Don’t talk about your desire to do renovations or make changes to the apartment. Don’t offer suggestions or comment on the way the building is currently managed or any of the staff with whom you’ve come into contact. These could be interpreted as an insult or criticism of their management. Less is more in a board interview. Don’t offer any additional information unless asked.
Answer all questions succinctly and politely. Even if you’re offended by a question, don’t show your frustration.
While in other forums it is often useful to have questions at the ready as a demonstration of your interest, you really shouldn’t raise them during a co-op interview. If the board asks if you have any questions, have some generic ones lined up about the neighborhood. Ask if they have a favorite restaurant or why they chose the building when they purchased.
Being approved by a co-op board is never a sure thing, but your odds will increase if you do your research, take the process seriously, and get help from a real estate professional who has experience in that building.
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